Bosses of G E Capital IT Solutions, previously called P&P Micro Distributors, announced the plans to workers at the Haslingden firm at a meeting transmitted by satellite to the company's other British sites.

Mr Henrik Sunch, president of the UK business, told employees on Monday evening that the firm, based on Carr's Industrial Estate, was starting a three month consultation period.

One employee, who did not wish to be named, said everyone was shocked by the news although there had been rumours about the firm's future for several days.

He said: "There are a lot of young married couples who work together at the site and it's come as a hard blow to them especially.

"The company is hoping to find a buyer which might save some of the jobs but it's looking grim."

Mr Craig Ferguson, an associate director based in London, said the firm was looking for ways of moving from computer distribution to e-commerce, software and other new markets.

Mr Ferguson said: "One of the proposals under consideration is that the business would be located under one roof close its main customers in the South East, with regional offices in the North and Scotland.

"Were we to lose some of the Rossendale employees, then we have measures to help them including a severance package and career counselling."

Mr Ferguson refused to say what the other possibilities were for the company, and said it had not yet been decided if the Northern office would be in Rossendale. He refused to say exactly how many people worked at the site but said it was approximately 300.

Councillor Michael Cruise, chairman of Rossendale's economic committee, said said council officers they were trying to contact the company to find out the situation. "If there are to be redundancies we will offer help to those affected to find alternative employment."

The Haslingden site was the major operation of P&P omputers - in its time one of the most successful businesses in East Lancashire.

It was founded by former social workers Peter and Pam Fisher in the early 1980s after they started importing personal computers from America.

The business grew into one of the area's biggest employers with more than 1,200 staff. It floated on the stockmarket in 1988.

The original business changed its name to Skillsgroup in 1997 and sold off a number of operations including the P&P Micros arm as it moved more into training and consultancy work.

Peter Fisher, who now has no involvement in the business, is chairman of Action for Haslingden Partnership which helps to create new jobs and improve the local area.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.